IT’S TIME TO GET OUT OF THE SLOW LANE – THE CASE FOR PUBLIC OWNERSHIP OF UK TELECOMMUNICATIONS
A faith in private sector efficiency, based on an ideology of competition, backs up the free market consensus across the major political parties in the UK.
A closer look at the results of the first major privatisation of the Thatcher era, telecommunications, can expose that private sector efficiency as a myth. We believe the case for public ownership of the telecommunications sector makes economic sense. Capitalism is a very efficient system when it comes to maximising profits for shareholders, but not when it comes to the most rational and efficient use of resources and human creativity. This is an important lesson we need to remember at this time of encroaching privatisation of health and education.
Since the privatisation of UK telecommunications in 1984 the industry has generated mega profits for its shareholders on the back of the unprecedented explosion of demand for communications in the last few decades. But in 2010 the UK was ranked 14th in the world in terms of broadband and telecoms infrastructure. The UK ranked a lowly 16th in Europe for connection speeds and there are issues of access for those in remote geographical locations and on lower incomes – a ‘digital divide’.
Governments and regulators in the UK have for thirty years promoted a competitive, fragmented telecoms industry as providing choice and value but nothing could be further from the truth. The Government has recently lauded BT for its half a billion investment in next generation access projects to deliver superfast broadband including BT Infinity. However all the experts agree that much more substantial investment is needed (estimated at up to £30 billion) to build a comprehensive network with effective capacity for the future based on ‘fibre to the home’.
But no telecommunication firm in the UK is prepared to do this. Indeed why would they? Such a long term strategy is beyond the foresight of the ‘free market’. However rational planning, organisation and democratic control of telecommunications under public ownership could facilitate effective investment in universal access to superfast broadband and result in significant economic and social benefits for all..
Instead the history of the privatised telecommunications sector in the UK is one of fragmented monopoly in service delivery and stifled technological development with stop-start investment, wasteful selling and installation of products and unnecessary duplication of networks. In addition incredible economic models have lead to time and energy (and remuneration) spent on bid writing and financial modelling and very little on meeting customer needs.
Regulation is rigged competition
The rigged competitive model that has been the basis for regulation in the UK telecommunication sector since privatization is in fact a façade behind which guaranteed profits are made by the major firms dividing up the market between them whilst customers and workers lose out. Similar economic models based on ‘competition’ exist in other utilities in the private sector such as water, gas, and electricity. Adam Smith and the promoters of the virtues of the free market would look on in disbelief at the way the current regulatory set up protects the ruthless pirate operations of the giant private telecom monopolies and other utility operators. This economic model has little to do with freedom.
Under the current regulatory set up ordinary customers loose out, for there could be cheaper and more efficient delivery of telecom services if the sector did not prioritise services for big business. Under the current economic model for the development of telecommunications ordinary citizens loose out, for a publicly owned and controlled telecoms sector could be an engine room for creating jobs and improving the living standards and prospects of the majority of our people.
Public ownership would allow the criteria for policy decisions on telecoms development to be the public good rather than by the dictates of a market system based on short term profits whether from transient ‘content’ fashions or ‘quick fix’ technological solutions. Is the point of technological development to boost Rupert Murdoch’s profits? Instead public ownership of telecoms could provide environmental improvements, stimulate industrial growth and increase investment in wider economic regeneration and growth in the UK along egalitarian lines. We can only achieve this if the economic control of the sector is in the hands of the majority, rather than the representatives of financial speculators, tax avoiders and asset-strippers.
The experience of telecommunications workers is of a sector where stress and bullying at work is rife under the guise of performance management, and of a two tier workforce with extensive use of agency labour, contracting out and off shoring. Telecoms employers frequently use union busting techniques such as the recent derecognition drive in Virgin Media.
There is an alternative
There is an alternative. It is not the public ownership of the old model of nationalised industries which shared many of the worst features of capitalist monopolies. What we want is a system that is run by and for workers and consumers themselves. In order to achieve this alternative we need a changed and renewed trade union and labour movement. That movement needs to believe such an alternative is possible and be willing to fight for it against those who will hold on to their means of power and wealth.
In order to meet this challenge we have to organise but also articulate a vision of the sort of society we can aspire to and the true goals of productive labour. Advances in technology in the twentieth century delivered hundreds of millions of working class people freedom from drudgery, whether from back breaking manual grind, repetitive clerical tasks, or unpaid domestic labour. The explosion in the development of, and the convergence of, telecoms, internet and media technologies over the past few decades are a continuation of this.
New social relations are created by technological change – and the current changes provide the opportunity for a truly global interconnectivity. The possibilities of this massive acceleration of universal connectedness can raise us to a higher level. We are in a new phase of the development of our human nature – an expansion of human needs and wants and the opportunity of meeting more human needs. This is why the wastefulness of this technology for the end of private profit is not just an economic injustice but a denial of our humanity. Economic development under capitalism creates the possibilities of the greater flourishing of our collective being, but only if we own and control it.
Our labour movement leadership should take a clear position against the principles of free market economics. We call for the Labour Party to support a publicly owned and accountable telecoms industry. Communications industries are so vital to our economy and are natural monopolies that should be run in the interests of the public. We believe that if the public ownership of telecommunications and post were included as a commitment in the manifesto for the next election it would be a vote winner.
RESIST THE CUTS – REPEAL THE ANTI UNION LAWS
While corporate fat cats in the financial services industry and elsewhere are still raking in mega pay pots – including enormous bonuses and pensions, the working class are being made to pay. We did not cause the financial crisis – they did ! – yet we have paid with job losses lower pay rates, a shrinking of the State and cuts to the NHS and other public services, and the real rise in our cost of living.
The economic crisis has exacerbated the vast pay gap that exists between the high and low paid, a gap that had been increasing over the past few decades. The share of income going to shareholders has gone up, whilst workers share of the economic pie has been reduced. With privatisation in postal sector now a reality this will only make things worse.
One of the main causes of growing income inequality across the UK is the anti-union laws that shackle us from taking effective collective action to defend ourselves, our terms and conditions, and our rights at work. In the last few years there has been a growing consensus amongst UK unions that we need to turn the tide – to repeal iniquitous anti-union laws and replace them with positive rights for workers. There is an opportunity to put this long overdue change high up the political agenda in the run up to the 2015 General Election.
Industrial action balloting laws must be changed so that democratic votes for action are not scuppered by high court judges citing minor administrative matters. We need fairer legislation that allows union collective bargaining where a majority of employees want it. The law must not be used to prevent those working for the same company taking industrial action together in pursuance of a common interest. The legal right to reinstatement must be awarded to employees who win Employment Tribunals against unfair dismissal, with fees for tribunals abolished.We need employment and trade union rights from day-one of employment and reversal of the watering down of equality legislation.
The CWU and other Unions must promote the aims of Keith Ewing and John Hendy’s, Manifesto for Collective Bargaining, which makes the case for building on the current union collective bargaining structures to improve workplace democracy and increase the collective power of workers. The CWU must campaign for these improved employment and trade union rights in the Labour Party, including through the Party policy making process, to be included in the next Labour Party general election manifesto. See the Institute of Employment rights website www.ier.org.uk